Carbon Transition (ticker: CARBN) recently decided to become an investment company engaged in the energy transition area and announced a convertible loan in Arbaflame to be the first investment. CEO Ronny Bøhn of Carbon Transition and CEO Bjørn Halvard Knappskog of Arbaflame are presenting the companies, explaining why the Arbaflame investment fits the new strategy as well as holding a Q&A session. Questions can be submitted in advance to ir@carbn.no.
Carbon Transition announced on 7 July 2021 its investment of NOK 30 million in a convertible loan to Arbaflame. Arbaflame has spent a decade and invested around NOK 550 million (owner’s equity/equity like instruments and grants) in developing a patented technology which enables the production of black pellets from bio waste (“ArbaCore”). ArbaCore can fully replace coal in coal-fired power plants worldwide. When replacing coal with ArbaCore in coal fired power plants, Co2 emissions are reduced by approximately 90% compared to coal. Arbaflame has recently completed construction of it first production facility in Kongsvinger, Norway (ArbaOne). The facility has an annual production capacity of 70,000 tons of ArbaCore pellets. Arbaflame has recently signed an off-take agreement for most of the production (at ArbaOne) the next 5 years which corresponds to a backlog of up to EUR 65 million, given certain conditions being met.
The ArbaCore black pellets not only drastically reduces carbon emissions compared to coal, but it also has large benefits compared to white pellets and other black pellets on the market in terms of demonstrated fuel properties. Equally importantly, coal-fired power plants can utilize ArbaCore in their existing plants with only minimal adjustments to the plants and related infrastructure, which also makes ArbaCore the superior economical choice for energy producers.
Through the same process of making ArbaCore pellets from bio waste, Arbaflame’s technology is also able to extract high-value biochemicals with significant positive environmental impact and high earnings potential. This product area which operates under the name ArbaRaf, includes bio-chemical products such as furfural, methanol and aromatics. In addition, the company has an R&D program for bi-products such as bioplastics and fish feed. Arbaflame has signed an MOU with a Belgian off-taker for the entire volume of furfural from the first production plant at Kongsvinger. The extraction of biochemicals is currently undergoing further R&D to fully utilize the potential and Arbaflame expects that biochemicals has the potential to constitute at least 50% of their earnings over time.
